Reactions Magazine: Trade groups call for NFIP Senate action

Apr 15, 2010

Readtions Manazine published this article on April 14, 2010.

The National Flood Insurance Programme’s (NFIP) reauthorisation, embedded in HR 4851, the Continuing Extension Act of 2010, remains stalled in the Senate.

Read more: [NFIP] [Senate] [National Flood Insurance Programme] [Continuing Extension Act of 2010] [HR 4851] [American Insurance Association]

The National Flood Insurance Programme’s (NFIP) reauthorisation, embedded in HR 4851, the Continuing Extension Act of 2010, remains stalled in the Senate.

The US Senate has invoked cloture on the motion to proceed to HR 4851, the short-term extension bill that includes extending the National Flood Insurance Programme until April 30.

“There is now a maximum of 30 hours of debate on the bill before consideration of amendments,” says Blain Rethmeier, spokesman for the American Insurance Association. “Because of objections to the bill due to a lack of ‘pay-fors’, it appears likely that the entire 30 hours will be expended, meaning there is a chance a vote on the underlying bill won’t take place until Thursday.”

The NFIP programme has been repeatedly renewed and tacked on to a variety of unrelated bills. This most recent extension was approved after the NFIP was allowed to lapse for roughly two weeks.

HR 4213, which includes the longer-term extension of the NFIP until December 31 2010, is also being held up over a ‘pay-for’ issue, said Rethmeier.  Two of the large pay-fors were used for healthcare reform. No agreement has been reached on what the new pay-fors will be. 

Trade groups continue to warn that long-term extension and reform is necessary to make the NFIP more financially sound.

David Sampson, president and CEO of the Property Casualty Insurers Association of America (PCI) made the following statement response to the Senate Democrats’ urgent call for the reauthorisation of the programme: “We appreciate the Senate Democrats sounding the alarm on the urgent need to reauthorise the flood insurance programme.

“Since March 29, no flood insurance policies can be issued or renewed until the Senate reauthorises the programme. In addition, existing policyholders cannot increase their coverage.

“This is now the second lapse in flood insurance coverage already this year. These short-term extensions are setting a dangerous precedent that leaves homeowners vulnerable.

“Thousands of families are recovering from the devastating floods that ripped through the northeast. Spring flooding serves as a reminder that the NFIP serves more than just coastal areas. Over 5.5 million Americans rely on this vital program.

“A disjointed NFIP adds more uncertainty to the real estate market in flood-prone areas. Real estate closings across the nation are delayed during this NFIP hiatus because purchasers are required to obtain flood coverage under federally-backed mortgage requirements if a property is in a floodplain.

“With over $18bn in debt, the NFIP is a programme that needs meaningful reform. We need a long-term, sustainable solution to the flood programme. But the first step is reauthorising the programme immediately to protect homes and families.”